Business Case – Marl, Germany 24,000 Tyre Project

RFT’s Waste-to-Fuel Plant, to be located and constructed at the Evonik/Chemsite Chemical Park in Marl, in the North Rhine-Westphalia province of Germany, or possibly in Toronto will recycle scrap rubber tyres and waste rubber to produce commercial quantities of fuel oil, fuel gas, N5500 Grade carbon black, spherised carbon for anode production for lithium batteries  and scrap steel products whose oil and gas prices are dependent upon the price of crude oil. Located in Sarnia-Lambton’s Chemical Valley, about 180 miles (288 kilometres) southwest of Toronto, NOVA Chemicals’ Corunna site is a petrochemical complex that produces 1.9 billion pounds of ethylene and up to 1.1 billion pounds of co-products annually. It has excellent services that can be used by other processors such as RFT.

A Scoping Financial study for a 24,000 tonne per annum reactor estimates the Marl Project economic outcome as:

  • NPV has an expected value of $22.2 million per plant or euros 18.87 million
  • IRR has an expected value of 78% but much higher if 75% of sales of carbon black are sold as anode material
  • Payback Period PER PLANT has an expected value of 41 months (3.5 years)
  • Each plant expansion from 24,000 tonnes to 48,000 costs approximately 50% of capex.
Metric, x Per Plant p(x)=5% Expected p(x)=95%
Net Present Value, 9%/y RoD, M$ 11.4 22.2 33.9
IRR, % 20.3 36.0 53.6
Payback period, months 60.1 45.0 35.4
years 5.0 3.7 3.0

These metrics indicates this will be a robust investment, capable to withstand most of the uncertainties that possible variations in the factors of production and prices may impose to its economics.

Products to be Produced

Products to be Produced

Expected Revenue

Expected Revenue

Summary of Operating Costs

Operating costs US$/y K€/a
 Consumables 1,039 773
 Wages & salaries 1,638 1,220
 Capital related costs 613 456
 Power consumption 420 313
 Administration expenses including employees’ related expenses 927 690
Annual Operating costs 4,637 3,452

Wages and salaries are the major component of Opex.

Competitive Advantages

The RFT process has a well-established patent in the major tyre producing and consuming economies. This has prevented the major potential competitors developing a process that competes directly with our patent. There is a process that has been produced by Nippon Steel but it relies on the heat from the blast furnace to drive the pyrolysis process and this is impractical without a major source of heat nearby such as an iron and steel blast furnace.

The key advantages of the RFT process are contained in the methodology and the production process.

  1. The RFT process can accept any type of rubber from industrial rubber to solid rubber tyres. The only criteria are that they are shredded to a size that fits the input opening. Other processes require the tyre to be stripped of the metal which adds cost to the process, and others require the rubber to be reduced to granules.
  2. Shredded rubber is readily available in Germany from the major tyre recyclers who pay 10 to 30 euros per tonne for their disposal.
  3. A key advantage is the continuous process. The RFT process has a specially designed valve that allows the rubber to be fed continuously into the pyrolysis reactor without any loss of nitrogen or heat. This is a key function and this valve is critical to the process.
  4. Another advantage is the specially designed basket conveyor system that submerges the rubber into a metal bath. Over 300 different compounds were tested before the final alloy was selected for its maximum yield and performance.
  5. The relative simplicity of the process adds to its benefits. It is fully monitored and computerised and it is not reliant on the quality of the input. Apart from the pyrolysis reactors, all the front and backend equipment is readily available from standard petrochemical equipment.
  6. Possibly the most critical advantage is that the energy required to heat up and operate the system is less than 10% of the energy output, thus making the whole process an economical proposition. Other pyrolysis systems require the temperature to be as high as 1,600 degrees centigrade to pyrolyse the rubber.